There is a basic problem with that argument, tough - which is that the only way to reduce the carbon emissions of the wider economy is to encourage electrification of every aspect of it that can be electrified, and high electricity prices would make that near impossible, as people would simply continue to use fossil fuels instead of electrons. So what we need is a situation where electricity is

A: Cheap and abundant. - Ideally, cheaper than it is now! Remember, using resistance heaters with clean power is better than having a gas furnace, despite being an insanely wasteful use of electricity, and not everyone can use heat pumps.
B: carbon free and clean.
C: Demand and supply curves match up somehow without wrecking points A. or B - This means no gas fired peakers, and it means that any energy storage systems you include must cost less than your generating scheme. If you mean to solve it via overbuild and just wasting the surplus power, again, this cost needs counting.

This is a very tall order. In my judgement, it is, in fact, not possible to get there with renewables. A europe wide grid linking wind would still have large variations in output not linked in any way with demand swings.
It might be possible with nuclear and pumped storage, since the maximum storage capacity needed is what you need to cover day/night variation, but this is still going to add some to those costs listed. The ideal solution would, naturally, for the extra electricity consumed in the process of
"Electrify those bits of our economy not currently on the grid" were to fall overwhelmingly during the night, so that we end up with a much, much flatter demand curve. - This, however, would require the wide adoption of, oh, electric cars that do not need recharging during the day in normal use. (if people charge their cars at night + while they are at work, that doesnt help. the battery really needs to last all day in normal use. )

Note that this argument assumes ongoing free riding by fossil fuel. If fossil fuel is sold at full economic cost, then there is no need for electricity to be any cheaper than it is today, and it could indeed by a bit more expensive and still represent a substantial savings.

This argument also assumes there is no Connie Mae institution financing the capitalized savings of energy saving capital spending at subsidized terms (where it may be noted that this financial subsidy could easily be provided by a portion of a carbon fee while still recycling a majority of carbon fee payments as social dividend).

Remember, using resistance heaters with clean power is better than having a gas furnace, despite being an insanely wasteful use of electricity, and not everyone can use heat pumps.

In a (part-)nuclear grid, central heating can obviate this requirement.

For that matter, there is no good reason why we have to replace all current uses of fossil fuels with electricity: Heating requirements can be wholly obviated via appropriate architecture, even in Northern Finland in the winter; the need for transportation can be greatly abridged with improved city planning and settlement patterns; shipping can, for all non-perishable commodities, be powered by sail. The only major uses of fossil fuels I can think of off-hand are air travel (which will need to be replaced by trains and ships), industrial heat sources like furnaces and electricity generation for existing electricity demand.

This will kill the suburbs and radically alter the rural areas, of course. But our way of life is negotiable - the laws of physics are not.

Speaking of electrical heating. Both in Sweden and France, electrical heating was advocated by the utilities with the reasoning that this can reduce the nuclear-unfriendly daily variability of demand. However, the two load graphs I posted upthread reflect the snag with this: seasonal change. The graph for the first half year of 2010, which includes a heating season, shows lesser variability in total production minus net exports than the first six days of July graph, corresponding to the season when people don't use heating and generally consume less (less need for lights, less TV watching...). So, in the end, electric heating doesn't reduce balancing capacity requirements at all.

At least in Sweden, it was strongly advocated by Vattenfall and was backed by Vattenfalls role as monopoly grid controller. Local utilities that followed Vattenfalls line was rewarded by lower prices on electricity sold to them and higher prices on electricity sold from them. Utilities that did not follow the line was similarly punished. This was regulated in secret treaties (that has expired and are no longer secret) during the period that nuclear power was much debated and a referendum held on abolishment of nuclear power.

The electric heaters are very interesting. I've seen no study on this (but would love to make one), but my hypothesis is that the nuclear overbuild in the 80's in Sweden resulted in an oversupply of power, which had to be used for something. Enter the electric heaters.

What's really interesting is that Swedish power consumption has been pretty flat since 1985 (when the latest nukes came online), but the amount of electrical heating has steadily fallen, after the initial surge in use.

Essentially, the growth in power demand due to economic growth has been hidden by the constant draw-down of electric heaters. Now that that low value-added use of power has more or less been phased out, new generating capacity will be needed to fuel future economic growth.

The idea that the linkage in growth in GDP and power consumption in Sweden has been fundamentally broken, is going to be shown to be an empty shell. This means the projected power surplus of the future will fail to materialise.

Did I mention it would be totally cool to make a study where one can try to falsify this hypothesis? ;)

... in limiting factors between pumped hydro added to conventional hydro, pumped hydro into an artificial reservoir above a natural reservoir, and modular pumped hydro. The first is limited by conventional hydro capacity and rival reservoir uses, the second in a way parallel to coventional hydro by appropriate sites, the last by minimum efficient scale for economies of scale and availability of sites with sufficiently steep slopes and sufficient height differential between top and bottom reservoir.

A europe wide grid linking wind would still have large variations in output not linked in any way with demand swings.

... would also be a be a europe wide grid linking traditional hydro, which is eminently dispatchable, a europe wide grid linking run-of-river hydro, which while volatile seasonally is quite predictable on a load balancing time scale, and a europe wide grid linking generating capacity that can be readily fired with biocoal.

And of course, a europe wide grid linking wind would also be a europe wide grid crossing multiple time zones spreading peaks in CSP power availability.

Putting individual sustainable production technologies in 20th century silos will always make the challenges look harder than pooling them into a diverse portfolio.